What Does AFE Stand for in Finance?

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Finance business coworkers looking at company's budget
Finance business coworkers looking at company's budget (Image: KEMAL BA?/iStock/Getty Images)

In the world of finance, an AFE is an authorization for expenditure. To put it simply, it is allows a person or group of people to make a purchase or series of purchases.

Usage

AFE is an acronym used not only in the world of finance but is commonplace in corporations and government agencies. This is because decision-making within such organizations is compartmentalized and not everyone has the authority to make purchases at will.

Purpose

AFEs provide a form of record-keeping when it comes to expenditures. The size of the expenditure allowed is affected by the corporation's or government agency's budget.

Variations

The acronym AFE may also be known as an approval for expenditure but still holds the same meaning as an authorization for expenditure. The process for requesting or granting an AFE varies among corporations and government agencies.

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